Belt and Road

*Most recent data available
Sources: Economist Intelligence Unit, World Trade Organization

Political Highlights

Bahrain is a constitutional monarchy with an elected legislative assembly. The National Assembly is bicameral with a four-year term and the next election is due in late 2018. The government is dominated by members of the Sunni al-Khalifa royal family headed by the King Hamad bin Isa al-Khalifa. The country's Shia Muslim majority claims that they are economically and politically marginalized by the Sunni Muslim ruling family, which holds most of the important cabinet posts. It is anticipated that the political tensions will continue and the upcoming elections could act as a focal point, increasing political violence and protests.

Bahrain is a member of the coalition of Arab states, which has imposed a boycott on Qatar in June 2017, cutting diplomatic ties as well as trade and transport links with the country. It is anticipated that the political tensions within the Gulf Cooperation Council (GCC) countries to persist over the next few years. Meanwhile, Bahrain seeks to shore up its alliances with Western countries including the US and UK.

Economic Trend

^Forecast
Source: Economist Intelligence Unit, International Monetary Fund (IMF)

Bahrain is a relatively diversified economy with the non-oil sector contributed by more than 85% of its output. Its economy and financial system continued to perform well in 2017, with the economy expanding by 3.8%, despite the government's weak fiscal position and low level of foreign reserves.

In April 2018, Bahrain announced it had made a significant discovery of oil and gas in the offshore Khaleej Al Bahrain Basin, the largest find in the country since the 1930s. Oil production from the recently discovered large off-shore oil reservoir will likely, in the long term, improve the country's fiscal and external position.

While Bahrain was battered by the swings in oil prices, it is in talks with Saudi Arabia, the UAE and Kuwait for support that would help reducing its ballooning debt and shore up foreign exchange reserves. In August 2018, Moody's downgraded Bahrain's credit rating from B1 to B2 and maintained its negative outlook. The key drivers for the rating downgrade were due to a further rise in the country's external and government liquidity risks to particularly elevated levels and the risk that financial support from the GCC is not timely and comprehensive enough to maintain its credit profile.

Hong Kong – Bahrain Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Bahrain decreased by 17.7% from HK$ 852 million in 2016 to HK$ 701 million in 2017. The top three export categories to Bahrain were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-26.5%), (2) power generating machinery and equipment (-53.0%), and (3) office machines and automatic data processing machines (-25.2%), which represented 58.4% of total exports to Bahrain.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Bahrain buyers. In the past 12 months (from August 2017 to July 2018), the insured business from Bahrain was limited and there was no claim payment or payment difficulty case reported.

Please click here to download the charts (PDF format).

Last update: 22 August 2018

* Most recent data available
Source: Economist Intelligence Unit, World Trade Organisation

Political Highlights

Rwanda is a landlocked nation in eastern Africa. The president, directly elected by universal suffrage, is both the Head of State and Chief of Government. The bicameral legislature consists of a 24-seat upper house and a 80-seat lower house. Paul Kagame, who has ruled the country since 2000, was re-elected as president with an overwhelming 99% of vote in the presidential election in 2017. Kagame-led ruling party, the Rwandan Patriotic Front (RPF), looks set for another majority against a weak opposition in the coming parliamentary election in September 2018.

Despite the country was severely devastated by the genocide in 1994, the country’s political environment turned relatively stable after RPF took control of the country. Since early 2000s, the government has made socio-economic and political progress and consolidated peace among Rwandans. Remarkably, the country was ranked the third least corrupt country in Africa in 2017, according to Transparency International.
 

Economic Trend

*Estimate ^Forecast #Actual
Source: Economist Intelligence Unit

Source: Economist Intelligence Unit

Political Highlights

Pakistan emerged as an independent state in 1947 and is a member of the Commonwealth. The country is a federal parliamentary republic with the president as the head of state elected for a five-year term by members of the lower and upper house of parliament and four provincial assemblies. There is a bicameral legislature. The lower house is the national assembly and the upper house is the senate. The prime minister is the head of government elected by the national assembly. The Pakistan Tehreek-e-Insaf (PTI) led by Imran Khan became the single largest party in the general election held in July 2018, winning 158 of the 342 seats but failed to win a simple majority to form the government. Imran Khan, the prime minister-in-waiting, is expected to form a governing coalition with the opposition parties.

On the diplomatic front, China remains Pakistan's leading economic partner. The majority of funding from China has been allocated to energy and transport infrastructure projects including the China-Pakistan Economic Corridor (CPEC) under China's Belt and Road Initiative. Although public sentiment towards China remains favourable, the financing terms of CPEC investments will occasionally be a point of contention. Such disagreements, however, will not fundamentally threaten the strengthening of bilateral co-operation.

Economic Trend

Fiscal year ending 30 June
*Forecast
Source: Economist Intelligence Unit

Pakistan has a predominantly agricultural economy, with cotton, fisheries and forestry contributing about 25% of GDP, and it has large deposits of natural gas. Economic growth has been robust with strong growth registered in FY17-18, underpinned by increases in consumption and the improved performance of exports. The government has set a growth target of 6.2% for 2018-19 which is unlikely to be achieved amid an increase in the number of challenges including depleting foreign exchange reserves, weak currency and political uncertainties.

The country’s foreign exchange reserves have been sliding since the past two years, as remittances fall and imports increased. The monetary authorities have taken steps in recent months including uplift of key interest rates to address the deterioration in the external position. It is widely expected that, after the election, the new government would have to explore financing options from several sources including China and multilateral development banks, and possibly the International Monetary Fund (IMF). Higher oil prices has spiked the country’s annual inflation rate in June to 4-year high of 5.2%. The import bill and trade deficit is likely to remain high in FY18-19. To combat inflation and cool domestic demand, the State Bank of Pakistan in July has increased the third time its key interest rates to 7.5% in 2018.

Hong Kong – Pakistan Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Pakistan increased by 2.1% from HK$4,111 million in 2016 to HK$4,195 million in 2017. The top three export categories to Pakistan were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-16.6%), (2) office machines and automatic data processing machines (+67.3%), and (3) electrical machinery, apparatus and appliances, and electrical parts thereof (+39.4%), which represented 61.7% of total exports to Pakistan.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restriction on covering Pakistan buyers. In the past 12 months (from August 2017 to July 2018), the insured business from Pakistan was limited and there was no claim payment or payment difficulty case reported.

Please click here to download the charts (PDF format).

Last update: 17 Aug 2018

*Most recent data available
Source: Economist Intelligence Unit

Political Highlights

Sudan is a presidential republic wherein the president is the Head of State, Head of Government, and Commander-in-chief of the armed forces. Legislative duties are administered by the bicameral parliament consisting of a 426-member National Assembly and a Council of States composed of two representatives elected by each state assembly.

South Sudan gained independence from Sudan through a referendum in 2011. Although most of the oil production capacity in these two countries is in South Sudan, the country is landlocked and remains dependent on Sudan’s export pipelines and port. Civil unrest, disagreements over oil revenue sharing and border disputes have curtailed oil production and investment in both countries.

Prolonged US economic sanctions against the unified Sudan allowed Asian national oil companies to dominate the oil sectors in both Sudan and South Sudan. China, India and Malaysia hold large stakes in the leading consortia that operate oil fields and pipelines. In October 2017, the US announced the full lifting of sanctions on Sudan which it had first imposed in 1997. The lifting may provide opportunities for other foreign investors to enter the industry and has also led to increased levels of trade with the US and a renewed push by the government to attract foreign investment.

Economic Trend

* Forecast
Source: Economist Intelligence Unit

Economic conditions in Sudan have been challenging since the secession of South Sudan in 2011, and the associated loss of the bulk of oil exports. The authorities have implemented partial policy adjustments to help stabilizing the economy and re-establish growth, by allowing for greater exchange rate flexibility and reducing fuel subsidies. However, these measures were insufficient toward sustained macroeconomic stability and broad-based growth. The revocation of US sanctions on trade and financial flows in October 2017 has strengthened optimism and led to reductions in costs of imports, trade, and international financial services.

However, with the country lost its major oil output in 2011 depriving it of a crucial source of foreign currency. The central bank has held the indicative exchange rate at 28 pounds to the US dollar but the currency is largely unavailable at that price. The crisis has deepened over the past year as the black market for US dollars has effectively replaced the formal banking system. The shortage of foreign currency and expensive black market for dollars sapped its ability to import and made prices soar. The International Monetary Fund (IMF) has urged Sudan to float its currency to boost growth and investment, a measure that the Sudanese government has opposed.

Hong Kong – Sudan Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Sudan decreased by 35.0% from HK$56.8 million in 2016 to HK$36.9 million in 2017. The top three export categories to Pakistan were: (1) electrical machinery, apparatus and appliances, and electrical parts thereof (+72.6%), (2) professional, scientific and controlling instruments and apparatus (+27.1%), and (3) telecommunications and sound recording and reproducing apparatus and equipment (-80.1%), which represented 55.2% of total exports to Sudan.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Sudan buyers with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from August 2017 to July 2018), there was no insured business on Sudan.

Please click here to download the charts (PDF format).

Last update: 16 Aug 2018

Fiscal year ending 31 March
Source: Economist Intelligence Unit, Department of Commerce of India

Political Highlights

India is a federal republic governed under a parliamentary system. The ruling National Democratic Alliance (NDA) coalition has been in office since 2014 and is led by the centre-right Bharatiya Janata Party (BJP). The president is the Head of State while the prime minister is the Head of Government. The incumbent prime minister, Narendra Modi, is proving to be the country's most dominant political leader in decades and the NDA coalition is well placed to win a second five-year term at the parliamentary election in April-May 2019. The high popularity of Modi and the BJP helped bringing political stability to the country.

Externally, India-Pakistan over half century of conflict over control of Kashmir region sees a line of light. In August 2018, Modi congratulated the victory of new Pakistan Tehreek-e-Insaf (PTI) led by the new prime minister Imran Khan and both expressed to resolve the disputes through dialogue. 

India has strengthened security co-operation with the US in recent years.  However, the India-US relations is clouded by the recent trade disputes with tariffs being imposed from both sides, as a protectionist trade agenda is being pushed by the US.  Despite the current tensions are unlikely to escalate into a serious deterioration of the India-US ties, it may slow down the expansion of trade between the two countries.

Economic Trend

*Forecasts
Source: Economist Intelligence Unit

India’s real GDP grew by 7.3% in fiscal year 2017-18 (April – March), according to official data, confirming its status as the world’s fastest growing major economy in 2018. Economic expansion was driven predominately by private consumption and government expenditure. Also, the country was recovering from the effects of demonetization and the introduction of the Goods and Services Tax (GST) in previous years. It is expected to yield substantial growth dividends from higher efficiencies, and raise more revenues in the long term.

Though India’s increasing well-educated population and favourable demographics, majority of people still preoccupied with meeting their basic daily needs rather than following the latest consumer trends. While, middle-class households are growing and the country’s large population will become increasing important market for consumer goods.

While the external debt as a percentage of GDP is decreasing, economic risks remain tilted to the downside. On the external side, despite the reduction in imbalances and strengthening of buffers, the impact from intensified global financial market volatility could be disruptive. The current account remained in deficit at 3% of GDP in 2017-18, driven by a surge in the value of imports as oil prices remain high. The growth in exports was insufficient to offset the rising import bill. Also, the normalization of monetary policy in the US may also induce capital outflows from India’s debt market, putting downward pressure on the rupee.

Hong Kong – India Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to India increased by 35.9% from HK$116,702 million in 2016 to HK$158,635 million in 2017. The top three export categories to India were: (1) non-metallic mineral manufactures (+40.3%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+12.8%), and (3) non-ferrous metals (+236.0%), which represented 81.8% of total exports to India.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Indian buyers. Currently, the insured buyers in India are mainly small and medium-sized companies to listed companies. For 2017, when compared with 2016, the number and amount of credit limit applications on India decreased by 5.7% and 74.5% respectively, while insured business decreased by 2.5%. Major insured products were electrical appliances, electronics and clothing, which represented 85.8% of ECIC’s insured business on India.  The Corporation’s underwriting experience on India has been satisfactory, with two claim cases reported in the past 12 months (from July 2017 to June 2018), involving textiles, cameras and optical goods.

Please click here to download the charts (PDF format).

Last update: 14 August 2018

* Most recent data available
Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

Libya is under an ongoing civil war in recent years. The country has splintered and has been divided into competing political and military factions based in the east and west of Libya since 2014. The country currently has two rival governments which have yet to establish law and order. One led by Fayez al-Sarraj based in western Libya and supported by the United Nations (UN), and another unrecognised government under the leadership of Abdullah al-Thinni based in the east, and also a plethora of armed groups that pledge allegiance to either administration. The Thinni administration is backed by a powerful Gaddafi-era general, Khalifa Haftar, who controls most of the east and centre of the country.

A UN-proposed roadmap for Libya was unveiled in early 2018. The UN Action Plan seeks to first approve an electoral law and hold a referendum to approve the new constitution. However, past experience suggests that any election timeline is likely to slip as a result of political deadlock or fresh conflicts.

Economic Trend

*Forecast
Source: Economist Intelligence Unit, International Monetary Fund

Libya's economy depends almost entirely on the performance of the oil sector. The economy contracted throughout 2013-16, mainly as a result of the collapse of oil production and the consequent fiscal constraints. In 2017, the country registered a major improvement in its macroeconomic performance due to the boost in production and export of oil. With the growth in oil revenues, budget deficit has declined but is forecast to persist due to spending on state wages and subsidies continue to constitute the majority of public expenditures. The inflation rate has been on the rise in recent years, attributable to the supply chain disruption, weakening local currency as well as the removal of food subsidies.

Since the 2011 revolution, Libya has focused on recovering from the effects of war and years of international isolation, which have strongly affected the quality of the country’s infrastructure. The rival governments have delayed infrastructure development, and focused on security and political transition. Some expansion is planned for 2019-2020 in the electricity, water, healthcare and transportation sectors, providing opportunities for local and foreign investors. Strengthening public resource management and adopting a clear strategy should be a priority once the security situation improves.

Hong Kong – Libya Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Libya increased by 21.9% from HK$49.7 million in 2016 to HK$60.6 million in 2017. The top three export categories to Libya were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+18.9%), (2) office machines and automatic data processing machines (+106.9%), and (3) electrical machinery, apparatus and appliances, and electrical parts thereof (+34.2%), which represented 87.4% of total exports to Libya.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on buyers in Libya with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from August 2017 to July 2018), there was no insured business on Libya.

Please click here to download the charts (PDF format).

Last update: 3 August 2018

Source: Economist Intelligence Unit

Political Highlights

The Republic of Korea (often referred to as South Korea) is a presidential republic wherein the president is the Head of State, Head of Government and Commander-In-Chief of the armed forces for a single five-year term. Moon Jae-in from the Democratic Party was elected as president in May 2017. Taking advantage of his high approval rating after the inter-Korea summit in late April, the ruling Democratic Party won a landslide victory over the largest opposition Liberty Korea Party in the local elections in June 2018.

Unlike the supply-side-oriented policies pursued by the previous conservative administrations, Moon Jae-in seeks to implement a demand-driven economic programme to drive growth. The government is pursuing a sequence of policies aimed at narrowing income inequality and enhancing job security. These include increasing taxes on corporates entities and the wealthiest, raising the minimum wage as well as extending welfare benefits.

On the diplomatic front, the North Korea issues continue to dominate the national security of South Korea. The first meeting between the two Korean leaders in more than a decade in April followed by the subsequent historic summit between the US President Donald Trump and North Korea leader Kim Jong Un in June helped to ease the persistent political tensions. However, there are still growing concerns about whether the ongoing peace talks could lead to a genuine willingness for North Korea to denuclearize.

Economic Trend

^Forecast
Source: Economist Intelligence Unit

South Korea’s economic strength is based on its export sector, which made up over 50% of the country’s GDP. The export sector has enjoyed relatively high year-on-year growth rates driven by the global trade recovery in the wake of the global financial crisis in the last decade. While exports growth moderated in recent years compared to early 2010s, the current account is expected to remain in surplus thanks to the sustainable global growth momentum. However, the country’s exports are vulnerable to the rising protectionist sentiment and geopolitical tensions, among other things. In July, the central bank trimmed the country’s 2018 growth outlook to 2.9% from 3.0% on fears that the exports could be hit by the hit-for-tat tariffs imposed between the US and other nations.

The central bank of South Korea has kept its main policy interest rate unchanged at 1.5% since November 2017 after the first increase in more than six years. While loose monetary policy has supported economic growth in recent years, mounting household debt has become a side-effect. At the end of 2017, household debt accounted for approximately 75% of the country’s GDP, posting a drag on private consumption. Nevertheless, the growth in household debt slowed down in the first half of 2018 as the government stepped up measures to tighten lending terms.

Hong Kong – Korea Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to the Republic of Korea increased by 4.9% from HK$54,040 million in 2016 to HK$56,672 million in 2017. The top three export categories to the Republic of Korea were: (1) electrical machinery, apparatus and appliances and electrical parts thereof (-3.9%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+16.2%), and (3) office machines and automatic data processing machines (+51.6%), which represented 70.8% of total exports to the Republic of Korea.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering buyers in the Republic of Korea. Currently, the insured buyers in the Republic of Korea range from small and medium sized companies to listed companies. For 2017, the number and the amount of credit limit applications on the Republic of Korea increased by 2.5% and 191.3% respectively, while insured business decreased by 24.6%. Major insured products were clothing (+4.7%), electronics (+132.9%) and metallic products (+90.3%), which represented 56.3% of ECIC’s insured business on the Republic of Korea. The Corporation’s underwriting experience on the Republic of Korea has been satisfactory, with one payment difficulty case and one claim case in the past 12 months (from July 2017 to June 2018).

Please click here to download the charts (PDF format).

Last update: 2 August 2018

Source: Economist Intelligence Unit

Political Highlights

Afghanistan is a land-locked nation located within South Asia and Central Asia. According to the constitution adopted in 2004, the president is both the Chief of State and Head of Government elected by absolute majority vote to serve a 5-year term. The national legislative is a bicameral National Assembly comprising a 102-seat upper house and a 249-seat lower house. Elections for the lower house was originally due to be held in 2015, but had been postponed to October 2018 over security concerns and electoral reform process.

With a long history of war and conflict, insecurity is the major risk to the country’s political and social stability. On the diplomatic front, policy is largely influenced by its security concerns, which gives Pakistan a crucial role over the country’s security dynamics.  

Economic Trend

* Estimate ^ Forecast # Actual
Source: International Monetary Fund

Source: Economist Intelligence Unit

Political Highlights

Bhutan is a constitutional monarchy with an elected parliamentary. The Prime Minister is the Head of Government while the King is the Head of State. Jigme Khesar Namgyel Wangchuck became the country’s King in 2006 after the abdication of his father Jigme Singye Wangchuck. The current ruling party, the People’s Democratic Party (PDP) led by the Prime Minister Tshering Tobgay, has a solid majority in the National Assembly by holding 32 of the 47 seats. The country’s political environment has been stable and Tshering Tobgay is expected to win a second term in office in the next general election scheduled in October 2018.

Bhutan is a landlocked country located between India and China. The country has strong diplomatic ties with India for decades, and India remains influential over its foreign policy, defence and commerce. The two counties are operating a free trade regime with most of the Bhutan’s exports go to India. India is also Bhutan’s largest creditor and donor of external aid. The government is attempting to strike a balance between economic development and retaining the country's traditional commitment to environmental and social wellbeing. Promoting economic growth will be largely dependent on the ongoing construction, with Indian assistance, of several large-scale hydropower projects. China is also another important dimension in India-Bhutan relations. In June 2017, the trijunction Doklam area disputed between Bhutan and China has led to a standoff between the Indian and Chinese troops for over 70 days, which ended after an agreement was reached.
 

Economic Trend

* Forecast
Source: The International Monetary Fund (IMF)

Bhutan is classified as one of the Least Developed Countries (LDCs) by the United Nations. Its economy is small with limited connections to global markets. The country's mountainous terrain is a fundamental constraint to growth and rural poverty reduction. Weak access to road and transport infrastructure isolates a large proportion of rural people from markets and social services, and limits their livelihood to subsistence agriculture. One of the country’s biggest exports to India is hydroelectricity, which makes up one-third of total exports. Apart from that, minerals, cement, dolomite, and even cardamom are also sent to India. The economic growth is projected to remain strong in the coming years supported by hydropower construction and the commissioning of new hydropower plants, as well as by solid growth in domestic services, albeit from a low base.

Bhutanese ngultrum is pegged with the Indian rupee at parity. As most goods are imported from India, Bhutan’s prices broadly follow movements in India’s market prices. The persistent budget deficits have contributed to a buildup of public debt, and current account deficit remains sizable reflecting large imports associated with the construction of hydropower plants. Furthermore, while the Mangdechhu hydroelectric plant will start production in mid-2018, the delays of the two other key hydropower projects could limit the country’s economic growth in 2018 and 2019.

Hong Kong – Bhutan Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Bhutan increased by 173.7% from HK$7.6 million in 2016 to HK$20.8 million in 2017. The top three export categories to Bhutan were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+396.3%), (2) essential oils and resinoids and perfume materials; toilet, polishing and cleaning preparations (+3.1%), and (3) photographic apparatus, equipment and supplies and optical goods; watches and clocks (+33.6%), which represented 89.5% of total exports to Bhutan.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Bhutan buyers. In the past 12 months (from July 2017 to June 2018), there was no insured business on Bhutan.

Please click here to download the charts (PDF format).

Last update: 19 July 2018

Source: Economist Intelligence Unit

Political Highlights

Papua New Guinea is a constitutional monarchy recognising Queen Elizabeth II as the head of state. The country has three levels of government - national, provincial and local. The national parliament is a 111 member unicameral legislature elected for five-year terms by universal suffrage. The prime minister is the head of government, appointed and dismissed by the head of state on the proposal of parliament. The People's National Congress (PNC) coalition secured a majority in the parliament after Peter O'Neill's was re-elected as prime minister in the 2017 election. It is expected that PNC will remain the dominant party in the governing coalition during the current parliamentary term, which is scheduled to end in 2022

Papua New Guinea is Australia’s closest neighbour, and for reasons of proximity and a shared history. The country was under Australian administration until 1975. In recent years, Australia’s influence over Papua New Guinea has diminished considerably as a result of the rise in Chinese aid flows, with a particular focus on infrastructure and concessional loans.

Papua New Guinea is a member of the Asia-Pacific Economic Cooperation (APEC) and will be hosting the APEC summit in November 2018. The country stands to benefit from being in the global spotlight including an anticipated boost to investment, tourism and trade.

Economic Trend

*Forecast
Source: Economist Intelligence Unit

Papua New Guinea is highly reliant on the resources industry. Economic growth slowed sharply in 2016 and 2017 which reflected lower energy prices and associated cost-cutting in the resources sector, drought conditions hurting agricultural production as well as a decline in government spending. It is expected that annual growth to remain subdued in 2018 as a result of a recent shut down of its natural gas processing plant after a powerful 7.5 magnitude earthquake in February 2018.

In the past 5 years, sizeable fiscal deficits have strained the domestic financial system’s ability to absorb government borrowing. Further domestic financings are constrained as some banks are reaching internal limits for holding government securities. The government increased its reliance on external market debt to address the challenge on domestic financial constraint. However, rising external debt leaves the debt burden more vulnerable to potential local currency depreciation while debt serving cost will increase further. Moody’s changed its rating outlook to negative from stable while the B2 rating was affirmed in March 2018. Standard and Poor’s also downgraded its sovereign credit ratings to 'B' from 'B+' in April 2018.

Hong Kong – Papua New Guinea Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Papua New Guinea decreased by 22.4% from HK$295 million in 2016 to HK$229 million in 2017. The top three export categories to Papua New Guinea were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-39.6%), (2) beverages (-1.2%), and (3) electrical machinery, apparatus and appliances, and electrical parts thereof (+225.5%), which represented 70.1% of total exports to Papua New Guinea.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Papua New Guinea buyers. In the past 12 months (from July 2017 to June 2018), there was no insured business on Papua New Guinea.

Please click here to download the charts (PDF format).

Last update: 17 July 2018 

Source: Economist Intelligence Unit

Political Highlights

Bolivia is a landlocked state in South America. The president is both the Head of State and the Head of Government. Juan Evo Morales, the country’s first president of indigenous origin elected in 2005, was re-elected for the third term in 2014. The governing Movimiento al Socialismo (MAS) party holds more than two-thirds majority in Congress and has a widespread presence throughout the country.

The country’s political environment has been relatively unstable in recent time as Morales is to run for the elections in October 2019, seeking his fourth term in office. While the country’s constitution only allows two consecutive terms in office, the constitutional tribunal has ruled his first term in office does not count since he did not complete the full five-year term. In November 2017,the country’s constitutional court rescinded the presidential term limits on re-election on the ground of violation of human rights which annulled the result of a referendum held in 2016, and allows Morales to stand in the 2019 presidential election. The court ruling as a result triggered a long-running strike and mass protests across the country.

Bolivia strengthened its strategic partnership with China, and the two countries signed several agreements in June 2018 including the opening up of markets as well as a memorandum of cooperation under the framework of Belt and Road Initiative.

Economic Trend

* Estimate ^ Forecast # Actual
Source: International Monetary Fund

Sources: The World Factbook, World Trade Organization

Political Highlights 

Maldives is comprised of about 1,200 islands on the Indian Ocean. The country is a presidential representative democratic republic where the president is both head of government and head of state. The current president is Abdullah Yameen elected in 2013 and the next presidential election is due in September 2018. The country has been in turmoil since Yameen ordered a state of emergency in February 2018 and jailed opponents across the legislative and judiciary. The government is facing mounting international pressure especially from the US and the European Union (EU). In July 2018, the EU approved targeted sanctions on Maldives government officials.

The country and its neighbor, India, were previously in close relationship with strategic, economic and military cooperation. However, the Indo-Maldives relationship has been shaken with China’s presence in recent years. The Maldives government made amendments to Maldivian Constitution in July 2015 that allows foreigners to own land in perpetuity, provided that the project investment is over USD1 billion and 70% of the project site is on reclaimed land.  With increasing in foreign investment projects, the country debt level continued to rise in recent years. Opponents to the government criticized the policy which resulted in high level of government debts.

Economic Trend

*Estimate
Source: Economist Intelligence Unit

Maldives is a small geographically dispersed archipelago island nation with limited natural resources. It is mainly reliant on tourism and fishing. Tourism is the largest economic sector accounted for nearly 40% of total GDP and employed 16% of total workforce in 2017. The country’s high-end tourism has propelled the economy’s strong expansion over recent decades and helped the country gaining the middle-income status. Reliance on tourism makes GDP growth volatile. While the sector has competed effectively in the past, it is subject to the vagaries of nature, as well as fluctuations in tourist arrivals. The GDP growth improved in 2017 on the back of a recovery in tourism and emphasis on infrastructure development. However, the country continues to face large and growing fiscal and external imbalances. The country’s major challenge is to manage its surge in infrastructure investment which led to high and rising government debts.

The country’s gross international reserves stood at US$788.8 million at the end of April 2018, representing a growth of 59% and 9% in annual and monthly terms, respectively. However, the foreign-reserve buffers remained low against the high government debts resulted from the government’s infrastructure push. The ongoing mega projects include the China-Maldives Friendship Bridge, 25-storey Dharumavantha Hospital, expansion of Velana International Airport and the development of Hulhumale’ phase II. The country's infrastructure capacity to accommodate tourist arrivals will increase significantly in the coming years, but the perception of the Maldives' stability may have been damaged by precautionary travel advisories issued by the governments of several key markets after its announcement of state of emergency. Separately, the country maintains a credit rating of B2 and B+ by Moody’s and Fitch respectively, both with stable rating outlooks.

Hong Kong – Maldives Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Maldives increased by 1.2% from HK$112 million in 2016 to HK$113 million in 2017. The top three export categories to Maldives were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-21.4%), (2) other transport equipment (+750.3%), and (3) electrical machinery, apparatus & appliances and electrical parts thereof (+13.7%), which represented 65.0% of total exports to Maldives.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering buyers in Maldives. In the past 12 months (from July 2017 to June 2018), the insured business from Maldives was limited and there was no claim payment or payment difficulty case reported.

Please click here to download the charts (PDF format).

Last update: 3 July 2018

Source: World Trade Organization, The World Factbook

Political Highlights

Antigua and Barbuda is comprised of two major islands, lying between Caribbean Sea and Atlantic Ocean. The country is a constitutional monarchy with an elected parliamentary. The Prime Minister is the Head of Government while the Queen, Elizabeth II, is the Head of State. Prime Minister Gaston Browne has been ruling the country since 2014 and his Antigua and Barbuda Labour Party (ABLP) remains the largest party following the March 2018 general election.

On a diplomatic front, the country maintains good relations with Venezuela. The government of Venezuela was the first responder to the crisis and sent aids to the country when it was devastated by hurricanes last year. Furthermore, Venezuela forgave 50% of Antigua and Barbuda’s US$139 million debts under the PetroCaribe oil deal, an energy cooperation agreement initiated by the Government of Venezuela to provide a preferential payment arrangement for petroleum to some Caribbean countries.

Economic Trend

* Estimates ^Forecast
Source: The International Monetary Fund (IMF)

Tourism is the largest economic sector of Antigua and Barbuda, accounting for over 60% of GDP and 40% of investments. Major tourist arrivals are from the US, Canada and Europe. The country’s economic growth slowed in 2017 as it was hit by the hurricanes.

The International Monetary Fund (IMF) in March 2018 said that the country’s economic outlook has deteriorated and noted that the government’s reluctance to implement its recommendations on liabilities reduction. Also, the repeal of personal income tax would be the ongoing fiscal challenges of the country. However, the Antigua and Barbuda government denied the IMF to publish its assessment report on the country’s economy. Gaston Browne expressed that the report is not accurate and the country is doing much better last year. Gaston Browne outlined a US$1.2 billion national budget that included a US$448 million funding shortfall which he proposed to make up partially through borrowings.

Recent data showed that the country saw strongest overall visitor arrivals by air from January to June 2018, with an overall growth of 7% as compared to 2017. In addition, as the country continues its climb to economic resilience, it started a three year port modernization project worth US$90 million in April 2018.

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) offers coverage on Antigua and Barbuda buyers with payment terms in Irrevocable Letter of Credit (ILC). In the past 12 months (from July 2017 to June 2018), there was no insured business on Antigua and Barbuda.

Please click here to download the charts (PDF format).

Last update: 3 July 2018 

Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

Myanmar has a multiparty democratic system, but substantial political power still rests with the military. The country is transitioning into a more open country following decades of military rule and isolation. The National League for Democracy (NLD) led by Aung San Suu Kyi, the figurehead of the country’s pro-democracy movement, came into power in 2016, marking a milestone in the country's path to democracy. While Aung San Suu Kyi remains constitutionally barred from the presidency, she acts as a de facto leader by taking on a newly created role of state counselor as well as some key government positions. The parliament elected U Win Myint as president in March 2018, replacing U Htin Kyaw who has resigned due to illness.

Despite significant reforms, the president’s control over military remains limited. The power over the military rests with the commander-in-chief who has complete control over Myanmar’s security and police force. Apart from the political issues stemming from the liberalization process, the government faces other major challenges. Inside the country, ethnic and religious tensions, some of which are spilling into violence between the Buddhist majority and Muslim minority, pose a threat to political stability. A peace deal with ethnic-minority armed groups (EAGs) is unlikely to be secured by either the current or next administration.

When Myanmar was under full military rule, the US and other Western governments placed sanctions on the army regime. But as the top brass began sharing power with a civilian government, most of those broad sanctions were lifted gradually in the past decade. However, relations with the West have become strained in recent time due to the government’s mistreatment of the Muslim ethnic minority Rohingya. In December 2017, the US imposed sanctions on 52 people and entities including the Myanmar general Maung Maung Soe. Also, the EU and Canada have placed sanctions on Myanmar military officials including asset freezes and ban from travelling in June 2018.

Economic Trend

*Forecast
Source: International Monetary Fund (IMF)
Fiscal year begins 1 April of year shown

Myanmar has enjoyed one of the fastest growth rates in the region after the military, which ruled for nearly 50 years, ceded power in 2011 to a civilian government that ushered in rapid reforms, including the relaxation of foreign investment rules in 2013-2014. Economic reforms include establishing a managed float of the Kyat, granting the Central Bank operational independence, liberalizing the telecommunications sector, and grating licenses to foreign banks. The reforms have paid off with the economy growing strongly in recent years. The country recorded 6.7% GDP growth in 2017 from 5.9% in 2016, driven by recovery in agriculture and especially crop production, improved manufacturing performance and services growth.

With continued structural reforms and the strengthening of foreign direct investment in a number of industries, such as telecommunications, oil and gas, and manufacturing (primarily garments), the growth prospect of the Myanmar economy remains favorable. Thanks to its membership in the ASEAN and its strategic location between China and India, the country benefits from relocation of manufacturing plants around the region in search of lower labor cost. Furthermore, the country will enforce a new Companies Law on 1 August 2018, aiming at attracting more foreign investment.

However, the country’s GDP per capita remains low. Decades of isolationist policies resulted in macroeconomic imbalances and deficient infrastructure.  As merchandise import growth will remain strong as foreign-invested infrastructure projects caused huge demand for imported capital goods and raw materials, the growing trade shortfall will further widen the current-account gap in the years ahead.

Hong Kong – Myanmar Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Myanmar increased by 47.4% from HK$1,532 million in 2016 to HK$2,259 million in 2017. The top three export categories to Myanmar were: (1) textile yarn, fabrics, made-up articles, and related products (+37.3%), (2) plastics in non-primary forms (+386.4%), and (3) telecommunications and sound recording and reproducing apparatus and equipment (-14.4%), which represented 54.1% of total exports to Myanmar.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering buyers in Myanmar with the exception of those under sanctions. In the past 12 months (from June 2017 to May 2018, ECIC has no insured business on Myanmar.

Please click here to download the charts (PDF format).

Last update: 22 June 2018

Source: Economist Intelligence Unit

Political Highlights

Malaysia is a parliamentary democracy with a constitutional monarch. The Yang di-Pertuan Agong (or the King) is the Head of State. The Yang di-Pertuan Agong appoints the prime minister and, on the prime minister’s advice, the cabinet. In May 2018, the ruling party United Malays National Organisation (UMNO) has been ousted for the first time in the country’s 60-year history after an opposition alliance won a historic victory in national elections. Opposition Barisan Nasional (BN) leader, Mahathir Mohamad who was prime minister from 1981 to 2003 and now aged 92, sworn in as the country’s seventh prime minister in May 2018, winning 113 of 222 seats in the parliament's lower house. The next general election is scheduled for 2023.

Mahathir has made it a priority to cut the country’s debts. The new ruling coalition aims to fulfill 10 specific pledges within the first 100 days, including scraping the goods and services tax (GST), reintroduction of fuel subsidies, eradicate corruptions and review all mega projects awarded to foreign countries etc.

The country’s foreign policy will undergo some subtle changes under the new government. In June 2018, Mahathir announced to reinvigorate the "Look East policy" which focused on deepening ties with east Asia, especially Japan. The government will look to partner with Japanese companies to upgrade local infrastructure and for opportunities that promote the transfer of knowledge and technology between the two countries. Furthermore, Mahathir called for a review of the multilateral trade deal Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), saying smaller economies like Malaysia were at a disadvantage under the current terms.

Economic Trend

* Estimate  ^ Forecast
Source: Economist Intelligence Unit

Malaysia’s economy is highly open to international trade, with exports accounting for roughly 70% of GDP. Major exports include electrical appliances, electronic parts and components, oil and gas, palm oil and rubber. After a tumultuous 2016 in which real GDP grew at its slowest rate since 2009, the country’s economy performed strongly with growth of 5.9% in 2017, thanks to the upbeat global environment and the country’s exposure to the sustained upswing in the global tech cycle.

The new government has recently revealed that the country’s debt has ballooned to RM1.087 trillion (or 80% of GDP), substantially higher than the 50.8% of GDP claimed by the previous government. Mahathir has showed his determination to reduce the country’s indebtedness and especially to China. In mid June 2018, Mahathir has asked Japan to extend a yen credit in the form of soft loans, aiming to refinance its expensive debts. At the same time, the government planned to review infrastructure projects entered into by the previous administration with the aim of cutting its financial outlays by billions of ringgits.

Hong Kong – Malaysia Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Malaysia increased by 5.1% from HK$27,273 million in 2016 to HK$28,663 million in 2017. The top three export categories to Malaysia were: (1) electrical machinery, apparatus & appliances, and electrical parts thereof (+5.1%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+1.3%), and (3) office machines and automatic data processing machines (-5.2%), which represented 68.2% of total exports to Malaysia.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (HKECIC) imposes no restrictions on covering Malaysian buyers. Currently, the insured buyers in Malaysia range from small and medium sized companies to subsidiaries of foreign listed companies. For 2017, the number of credit limit applications on Malaysia decreased by 22.2%, while the amount of credit limit applications increased by 1.2%. Insured business increased by 0.8%. Major insured products were papers, electronics and chemical products, which represented 66.3% of ECIC’s insured business on Malaysia. The Corporation’s underwriting experience on Malaysia has been satisfactory, with no payment difficult or claim case reported during the past 12 months (from June 2017 to May 2018).

Please click here to download the charts (PDF format).

Last update: 13 June 2018

Source: Economist Intelligence Unit

Political Highlights

Vietnam has a communist government and is one of several remaining one-party socialist states in the world today. The ruling Communist Party of Vietnam (CPV) has been in power since the end of the Vietnam war in 1975. In 2016, the CPV had chosen the incumbent general secretary Nguyen Phu Trong as the country’s top leader for a second five-year term. Official corruption remains a serious problem for the country, owing to the general lack of accountability and transparency. The country ranked 107th out of 180 countries in Transparency International's 2017 Corruption Index. The country has in recent years stepped up its fight against corruption, with several senior government officials and executives of state-owned enterprises arrested and jailed.

The country has long-standing territorial disputes with China in the South China Sea which are unlikely to be resolved in near term. However, recently both sides displayed commitments to resolve these disputes peacefully through dialogue. Defense relations between Vietnam and the U.S. have strengthened since 2016, when President Obama decided to lift the ban on the sale of assault weapons to Vietnam. The economic, political and military co-operation between the two countries will continue to deepen.

Economic Trend

^Forecast
Source: Economist Intelligence Unit

Vietnam’s economic growth accelerated to 6.8% year-on-year in 2017, topping a 6.2% expansion in 2016. The strong growth was driven by higher domestic demand, strong export growth and the government's economic reforms. Strong foreign direct investments in manufacturing, combined with competitive unit labor costs relative to peers (Malaysia, Thailand, and Indonesia) and participation in free trade agreements could provide further upside to the country’s export earnings in 2018. The country reported record performance for Q1 2018 with GDP grew 7.4% on the back of a strong outturn in manufacturing, retail sales and tourism.

Recent fuel price hikes have kicked up Vietnam’s inflation in May 2018 to 3.86% year on year. Furthermore, the country is looking to increase an environmental protection duty on fuel products in July this year which could further increase inflation and hurt businesses. The country has set an inflation target of 4% for 2018.

The country is a member of the Association of South East Asian Nations (ASEAN) and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It has also signed trade pacts with China, South Korea, Australia and New Zealand, India, Chile and Japan, and will likely sign the EU-Vietnam Free Trade Agreement (EVFTA) with the European Union (EU) in the second half of 2018.

Hong Kong – Vietnam Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Vietnam increased by 10.3% from HK$72,173 million in 2016 to HK$79,632 million in 2017. The top three export categories to Vietnam were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+25.6%), (2) electrical machinery, apparatus and appliances, and electrical parts (+44.1%), and (3) textile yarn, fabrics, made-up articles, and related products (+17.5%), which represented 52.2% of total exports to Vietnam.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Vietnamese buyers. Currently, the insured buyers in Vietnam range from small and medium sized companies to subsidiaries of foreign listed companies. For 2017, the number and the amount of credit limit applications on Vietnam decreased by 20.2% and 54.5% respectively, while insured business increased by 30.6%. Major insured products were electrical appliances, electronics and textiles, which represented 72.7% of ECIC’s insured business on Vietnam. The Corporation’s underwriting experience on Vietnam has been has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from June 2017 to May 2018).

Please click here to download the charts (PDF format).

Last update: 13 June 2018

Source: Economist Intelligence Unit

Political Highlights

Thailand is a constitutional monarchy while the king's formal powers are limited. Prince Maha Vajiralongkorn became the country’s new king in December 2016 after his father Bhumibol Adulyadej died in October 2016. The country’s military has a history of intervening in politics. In May 2014, the country’s military seized control of the country after a coup deposed the elected government of Yingluck Shinawatra, resulting in the country's 19th coup since the end of absolute monarchy in 1932. The head of the army, General Prayuth Chan-ocha, was named as prime minister. The country in August 2016 passed a new military-backed constitution which empowered the military to select every one of the 250 senate members and granted them a veto on decisions by elected lawmakers. The new constitution affirmed the military government's rule and has restored stability. Elections, which would be held no later than February 2019, could restore some degree of civilian rule.

The military's seizure of power in 2014 initially cooled relations with Western countries but links are gradually being restored. The US administration under the president, Donald Trump, has led a partial rapprochement between the two countries, culminating in a state visit by Prayuth in October 2017. Similarly, the European Union's Foreign Affairs Council announced in December 2017 that it would re-establish political ties with Thailand at all levels.

The government has declared economic revival to be its priority and is pursuing policies aimed at boosting consumption and investment, including ramping up public spending on infrastructure. This includes the government’s Thailand 4.0 and Eastern Economic Corridor (EEC) initiatives as well as China’s Belt and Road initiative.

Economic Trend

*Estimate ^Forecast
Source: Economist Intelligence Unit

After the military seized power in 2014, the country’s economy rebounded with growth sustained by a pick-up in exports and tourism. Economic growth accelerated to 3.9% in 2017, from 3.3 % in 2016, bolstered by favorable global economic conditions and a pickup in domestic investment. For Q1 2018, growth surged to a five-year high of 4.8% year-on-year, compared to 4.0% in previous quarter. The government has implemented a number of policies geared toward enhancing productivity and competitiveness, in part to confront structural headwinds from an ageing population. The country climbed 20 spots to 26th place in the World Bank's Ease of Doing Business rankings as a result of efforts to reduce red tape in connection with starting a business; protecting minority investors; and improving contract enforcement.

Sustained current account surpluses and higher capital inflows over the past several years have driven an appreciation of the Thai baht and facilitated the accumulation of foreign reserves to USD213 billion in May 2018 from USD156 billion in 2015, which is helping the country to shield against volatility as US rates rise. The Thai baht remains one of the best-performing currencies in the region and has continued to strengthen against the US dollar in early 2018.

Hong Kong – Thailand Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Thailand increased by 12.9% from HK$47,949 million in 2016 to HK$54,135 million in 2017. The top three export categories to Thailand were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+26.0%), (2) electrical machinery, apparatus and appliances, and electrical parts (+13.9%), and (3) office machines and automatic data processing machines (-0.1%), which represented 60.6% of total exports to Thailand.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Thailand buyers. Currently, the insured buyers in Thailand are mainly small and medium-sized companies. For 2017, the number and the amount of credit limit applications on Thailand decreased by 8.3% and 52.0% respectively, while insured business increased by 16.3%. Major insured products were electronics, cameras & optical goods and furniture, which represented 31.2% of ECIC’s insured business on Thailand. The Corporation’s underwriting experience on Thailand has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from June 2017 to May 2018).

Please click here to download the charts (PDF format).

Last update: 12 June 2018

*Most recent data available
Source: Economist Intelligence Unit

Political Highlights

Economic Trend

*Estimate ^Forecast
Source: International Monetary Fund

Laos is one of the fastest growing economies in the region with average economic growth of 7.8% over the last decade, supported by the exploitation of natural resources, hydropower and high-speed railway construction projects led by China. However, economic growth is estimated to ease slightly to 6.8% in 2017 and 2018 partly due to slower credit expansion and fewer tourist arrivals. While the economy continues to grow, the country is set to be removed from the list of Least Developed Countries (LDCs) by the United Nations (UN) in 2024. .

Macroeconomic instability and high public debt remain a worry despite robust expansion of the country’s economy when compared to regional peers. Growth is still vulnerable and unsustainable as the resource sector remains predominant in the growth structure. Besides, the current account deficit is forecast to remain high on the back of rising imports of capital goods for infrastructure developments

Hong Kong – Laos Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Laos increased by 14.1% from HK$151 million in 2016 to HK$172 million in 2017. The top three export categories to Laos were: (1) textile yarn, fabrics, made-up articles and related products (+21.3%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+140.5%), and (3) machinery specialized for particular industries (-7.2%), which represented 48.3% of total exports to Laos.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering buyers in Laos. In the past 12 months (from June 2017 to May 2018), there was no insured business on Laos.

Please click here to download the charts (PDF format).

Last update: 13 June 2018

*Most recent data available
Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

Cambodia is a constitutional monarchy with an elected parliamentary. The Prime Minister is the Head of Government while the King is the Head of State. Prime Minister Hun Sen has been ruling Cambodia since 1985 and his Cambodian People’s Party (CPP) is the largest party following the 2013 general election. The country is preparing for a July 2018 general election that Hun Sen is widely expected to win. The Cambodia National Rescue Party (CNRP), the main opposition party, was dissolved by the Supreme Court in November 2017 for allegedly plotting to overthrow Hun Sen’s government. In February 2018, the CPP also swept the country’s Senate election by winning all 58 elected seats, further entrenching the dominance of the CPP and Hun Sen.

Agriculture employs roughly two-thirds of the labor force and contributes one-third of economic output, while garment-making is the dominant industry, accounting for about 70% of exports. The government will continue focusing on improving basic living conditions and pursue policies to reduce Cambodia's dependence on low value-added garment manufacturing, which is highly substitutable between countries, and can migrate quickly to those with better price competitiveness.
 

Economic Trend

* Forecast
Source: The International Monetary Fund, Trading Economics

Cambodia’s economic growth has been one of the fastest among Asia’s developing economies in recent years, driven by garment exports, tourism as well as real estate and construction activities. Tourist arrivals accelerated to 11.8% in 2017, compared to 5.0% in 2016, driven by the country’s efforts in establishing more regional flights, including China. The current account deficit is forecast to widen as the cost of oil and other imported products rises. Still, the country’s GDP is expected to grow 6.9% in 2018, support by large foreign direct investment flows and investment in infrastructure.

Faced with increasing costs in traditional manufacturing locations such as China, many multinational apparel companies have moved their production to cheaper locations like Cambodia. However, as the issue of low pay has sparked protests in recent years, the government in 2017 increased the minimum wage in the garment sector by 9.3% to USD 153 per month and further increase by 11% to USD 170 in January 2018 (compared to just USD 66 per month in early 2013), roughly matching Vietnam’s and significantly higher than Bangladesh’s USD 65. The growing competition from other low-cost garment producers and potential labor unrest represent challenges to Cambodia. The country is also vulnerable to negative shocks because of the high dollarization of loans and deposits, which could stem from a potential sharp appreciation of the US dollar and spikes in US and domestic interest rates in 2018 and 2019.

Source: Economist Intelligence Unit

Political Highlights

Trinidad and Tobago is an unitary state comprising of two islands at the southern-most end of the Caribbean archipelago. The president is the head of state and is elected by an electoral college comprising all the members of parliament. The executive is led by the prime minister who heads a cabinet and responsible to parliament. In 2015, Keith Rowley sworn in to office as the country’s prime minister and his centre-left People’s National Movement (PNM) government is expected to remain in power until the next election in 2020, owing to its parliamentary majority.

On a diplomatic front, the country maintains good relations with Venezuela, mainly focused on cross-border oil and gas issues. Migration and border control issues are likely to take a larger role in bilateral relations as the Venezuelan mass migration worsened in recent time. 

Economic Trend

*Estimate ^Forecast
Source: The International Monetary Fund (IMF)

Trinidad and Tobago is the world’s largest exporter of ammonia and methanol, and the sixth largest exporter of liquefied natural gas. Energy sector accounted for almost half of the country’s GDP and 80% of export earnings. With the recovery of energy prices, the rate of economic contraction has eased to 2.6% in 2017, and is expected to emerge from recession in 2018-2019. The current account deficit is expected to narrow gradually along with the improvement of energy prices. Trade balance is expected to back into a surplus while services balance will remain in deficit as growth in shipping cost outpaces tourism income.

The central bank adopted a neutral monetary policy and has maintained its main policy rate at 4.75% since 2015. Due to lower inflow of capital from energy sector in recent years, there was pressure on domestic foreign exchange market. The central bank has provided foreign exchange to the domestic market in order to maintain stable market. Though international reserve remained sufficient, the central is trying to restore equilibrium in foreign exchange market by careful coordination of fiscal, monetary and structural policies.

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Hong Kong – Trinidad and Tobago Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Trinidad and Tabago decreased by 7.2% from HK$350 million in 2016 to HK$325 million in 2017. The top three export categories to Trinidad and Tabago were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-5.4%), (2) office machines and automatic data processing machines (-6.7%), and (3) electrical machinery apparatus & appliances and electrical parts thereof (-43.3%), which represented 87.1% of total exports to Trinidad and Tobago.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering buyers in Trinidad and Tobago. In the past 12 months (from June 2017 to May 2018), the insured business from Trinidad and Tobago was limited and there was no claim payment or payment difficulty case reported.

Please click here to download the charts (PDF format).

Last update: 5 June 2018

Source: Economist Intelligence Unit

Political Highlights

Indonesia is the world's third most populous democracy and the world's largest Muslim-majority country. Political environment has been relatively stable since the country’s first direct presidential election in 2004. The current president, Joko Widodo, is the first president to come from outside the political and military background, and he has no ties with influential families. Since taking office in 2014, Widodo has been successful in pushing through some of his economic reform pledges, aided by a number of professional technocrats which lead the top economic ministries. In January 2018, Widodo made his third cabinet reshuffle, which provides more balance to influential groups and parties in the political system. Now Widodo still enjoys widespread popularity across the country and is well placed for re-election in April 2019.
 

The country has the largest Muslim populations and remains vulnerable to Islamic radicalism with occasional terrorist attacks over the past years. The authorities have been working hard to fight against terrorism and approved a tougher anti-terrorism law in late May 2018 after the recent bombings. Relative to other Islamic countries, the country maintains relatively good diplomatic ties with the US, and is one of the few Muslim-majority countries that have been excluded from President Donald Trump's travel bans into the US. On a diplomatic front, Indonesia and India recently agreed to align their national maritime policies. Both countries agreed to develop maritime and economic infrastructure on their respective outer island. This result in a rebalancing of powers and countries in the geographical neighborhood.

Economic Trend

*Estimate ^Forecast
Source: Economist Intelligence Unit

Indonesia is the largest economy in Southeast Asia. The country is a leading commodities exporter in a number of resources, including coal, palm oil, cocoa, tin and nickel. Economic growth in 2017 accelerated to 5.1%, the highest growth rate in four years. Growth continued to expand at a pace of 5.1% in the first quarter of 2018. The growth was attributed to improved global trade, recovery in commodity prices, as well as higher government spending. The country’s sound macro-economic fundamentals continue to provide a solid buffer against rising global volatilities. In 2017, the country’s sovereign bonds were all rated investment grade by all three major credit rating agencies S&P, Moody’s and Fitch, this is the first time since the Asian financial crisis.

The Indonesian rupiah has depreciated by around 3% against US dollar this year as a result of gradual tightening of US monetary policy. Around 40% of the country’s rupiah-denominated government debts are in hands of foreign investors and therefore is vulnerable to sudden capital outflows. Most recently in May 2018, despite stable inflation, the central bank raised interest rate twice in a month to support the currency.

The country’s outlook continues to be largely positive despite global economic growth is projected to slow. Economic growth in 2018 is projected to reach 5.2% on the back of strong private consumption and the continued strength of commodity prices.

Hong Kong – Indonesia Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Indonesia increased by 7.2% from HK$20,922 million in 2016 to HK$22,421 million in 2017. The top three export categories to Indonesia were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+1.9%), (2) textile yarn, fabrics, made-up articles and related products (+3.1%), and (3) office machines and automatic data processing machines (-6.1%), which represented 58.2% of total exports to Indonesia.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Indonesian buyers. Currently, the insured buyers in Indonesia range from small and medium sized companies to subsidiaries of foreign listed companies. The Corporation’s major insured products were clothing, chemical products and plastic articles, which represented 61% of ECIC’s insured business on Indonesia in 2017. The Corporation’s underwriting experience on Indonesia has been satisfactory, with no claim payment or payment difficulty case reported in the past 12 months (from May 2017 to April 2018).

Please click here to download the charts (PDF format).

Last update: 24 May 2018

* Most recent data available
Source: Economist Intelligence Unit, World Trade Organization

Political Highlights

Brunei Darussalam (“Brunei”) is an absolute monarchy where the Sultan is both the Chief of State and Head of Government. The country’s political environment is expected to remain stable in 2018-19 owing to the well-entrenched autocracy under the rule of Hassanal Bolkiah. There is currently only one legal political party, the Parti Pembangunan (PP, National Development Party) which was legalised in 2005 but appears to be inactive.

Brunei relies excessively on its oil and gas exports which causes economic growth to be heavily influenced by the energy prices. There is no personal income tax or capital gain tax in the country. The government provides housing subsidies, free medical services and free education through the university level. However, there has been growing concern about the country’s ability to maintain high spending levels without imposing additional taxes, as oil prices fell sharply in the past few years.

In March 2018, Brunei and 10 other countries signed the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP), a free trade agreement linking the Asia-Pacific countries, through which Brunei will have enhanced market access to these economies in the hope of diversifying its economy.

The country was named the most improved economy in the world for three years in a row in the World Bank's Doing Business Report 2018. Within four years the country has jumped 49 places to 56th and the significant improvements reflect the commitment of the government towards creating a pro-business environment that would enable further diversification of the country's economy.  

Economic Trend

*Estimates  #Actual  ^Forecast
Source: Economist Intelligence Unit , International Monetary Fund, Department of Economic Planning and Development

Brunei is a rich country, ranked 6th in the world according to the GDP per capita data by IMF. The country possesses vast natural resources including crude oil and natural gas. The oil and gas sector contributed about one-third of its GDP and over 90% of its exports. Between 2013 and 2016, the economy contracted as oil prices plummeted to their lowest level in a decade and oil production suffered from unexpected disruptions. As oil and gas prices recover, the economy showed signs of improvement in 2017. However, oil and gas reserves are in steady decline and expected to run out within two decades.

For greater diversification of the economy to reverse the declining fortunes, the country has outlined the “Brunei Vision 2035” long-term development plan, which aims to transform the country into a regional trading and financial hub within the next two decades.

The country is expected to see a modest recovery in 2018 with a small positive growth led by improvement in oil and gas production and expansion in investment as infrastructure and foreign direct investment construction projects are progressing.

Hong Kong – Brunei Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Brunei decreased by 1.7% from HK$162 million in 2016 to HK$159 million in 2017. The top three export categories to Brunei were: (1) telecommunications and sound recording and reproducing apparatus and equipment (-47.5%), (2) petroleum, petroleum products and related materials (+28.4%), and (3) professional, scientific and controlling instruments and apparatus (+1,018.3%), which represented 52.5% of total exports to Brunei.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Bruneian buyers. In the past 12 months (from May 2017 to April 2018), the insured business from Brunei was limited and there was no claim payment or payment difficulty case reported.

Please click here to download the charts (PDF format).

Last update: 18 May 2018

*Most recent data available
Source: Economist Intelligence Unit, World Bank

Political Highlights

Mongolia is a multiparty parliamentary democracy with both a president and a prime minister. The prime minister is the Head the Government, while the president has limited powers including the ability to veto legislation and to propose his own laws to parliament. The Democratic Party (DP) and the Mongolian People’s Party (MPP) are the country’s two largest parties. The MPP won a landslide victory by securing 65 out of 76 seats in the general election of June 2016. However, the MPP in 2017 lost a key presidential election to the opposition DP candidate Khaltmaagiin Battulga and the Prime Minister Jargaltulga Erdenebat was removed following a no-confidence motion. The new prime minister Ukhnaa Khurelsukh took office in October 2017. No Mongolian prime minister has completed a four-year term since 2004 and parliamentary politics will continue to be plagued by periods of instability in the form of internal conflicts and the intermittent turnover of government officials.

The two neighbor countries China and Russia exert significant influence over the landlocked Mongolia. The country’s “third neighbor" foreign policy appears to be weakening as China's looming presence persists. With the signing of the China-Mongolia-Russia economic corridor in June 2016, which is one of the six priority corridors envisioned by China’s Belt and Road Initiative, the Sino-Mongolian relations entered a new era of economic cooperation that will be vital to the country’s economic recovery and long term stability.

Economic Trend

*Estimate ^Forecast
Source: Economist Intelligence Unit, The IMF

Mongolia’s economy is heavily reliant on mining and minerals and the country’s economic performance has been tumultuous in the past 7 years. It was the world's fastest-growing economy in 2011 with GDP growth of 17.3% on the back of a mining boom and attracted billions of dollars in foreign investment. The boom ended as commodities prices slumped in 2014 coupled with slower demand from China. The country faced a debt crisis in 2016 largely driven by a debt-financed public spending spree since 2011. In May 2017, the cash-strapped government announced a USD 5.5 billion bailout agreement with the International Monetary Fund (IMF) and other development partners, including the World Bank, the Asian Development Bank and the governments of Japan and South Korea. The rescue program called sets of policy changes including increases in personal income tax rates, increases in fuel, alcohol and tobacco taxes, and a public service wage freeze.

The country’s economy bounced back strongly in 2017, with GDP growth of 5.1%, due to a sharp rise in commodity prices and volumes of coal and copper exports. Economic growth is forecast to remain solid in 2018 and 2019 on back of continued investment in mining, particularly in the development of the Oyu Tolgoi and Tavan Tolgoi mine projects. However, as a commodity-reliant economy, the country’s susceptibility to commodity price boom-bust cycles remains high. Continued government commitment to the program will be the key in ensuring that macroeconomic buffers are built up and hence reducing the country’s vulnerability to boom-bust cycles in the future.

Hong Kong – Mongolia Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Mongolia increased by 17.5% from HK$ 211 million in 2016 to HK$ 248 million in 2017. The top three export categories to Mongolia were: (1) office machines and automatic data processing machines (+43.8%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+19.7%), and (3) beverages (-10.1%), which represented 74.5% of total exports to Mongolia.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Mongolian buyers. In the past 12 months (from May 2017 to April 2018), the insured business from Mongolia was limited and there was no claim payment or payment difficulty case reported.

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Last update: 10 May 2018

*Most recent data available
Source: Economist Intelligence Unit, The World Factbook

Political Highlights

Singapore is parliamentary democracy, with an elective, non-executive presidency. The Prime Minister Lee Hsien Loong is the leader of the majority People's Action Party (PAP) in parliament. The governing PAP has been in power since 1959 and is forecast to remain in office following the next parliamentary general election in 2021. The president, PAP-endorsed candidate Halimah Yacob, was elected for a six-year term in September 2017 but the uncontested election in which applications from four candidates were rejected had led to small-scale protests against the government.

Singapore maintains close ties with its close neighbors Malaysia and Indonesia which has been strengthened in recent years by projects such as the high-speed rail link and on issues of mutual concern such as anti-terrorism. The country’s membership of regional trade pacts including the Comprehensive and Progressive Partnership for Trans-Pacific Partnership (CPTPP) will also prove essential to its long-term economic prospects. Furthermore, Singapore is EU's largest commercial partner in ASEAN, accounting for around one-third of EU-ASEAN trade in goods and services, and roughly two-thirds of investments between the two regions. In October 2014, a free trade agreement (the “EUSFTA”) was signed between Singapore and the European Union (EU) and is expected coming into force by the end of 2019. EUSFTA is the first deal between the EU and a South-East Asian economy which paves the way for greater engagement between the two regions.

Singapore is a highly developed economy but the human rights in Singapore still have a long way to go. The government has broad powers to limit citizens' rights and inhibit political opposition. Freedom of expression and peaceful assembly are restricted. Domestic media is tightly controlled and recently a number of global tech giants raised concerns over the government’s plan to introduce new legislation to rein in fake news. The country was ranked 151 out of 180 in the World Press Freedom Index for 2017.

Economic Trend

* Forecasts
Source: Economist Intelligence Unit

Singapore’s highly developed free-market economy owes its success in large measure to its remarkably open and corruption-free business environment, prudent monetary and fiscal policies, and a transparent legal framework. Its strategic location between the East and West make it one of the world’s top transportation hubs for sea and air cargo. It is also the second freest economy behind Hong Kong according to the 2018 Index of Economic Freedom.

The country is highly dependent on international trade which represented 318% of the GDP in 2016 according to the WTO. The economy performed better than expected in 2017 with a GDP growth of 3.6% driven by stronger external demand particularly in semiconductor exports. The highly open economy leaves it vulnerable to external shocks. However, its high current account surplus provides an ample buffer against capital flow volatility. For 2018, economic growth is expected to slow down to 3.0% owing to expected slower economic expansion of its trading partner China.

In April 2018, Standard & Poor's affirmed the country’s “AAA” long-term credit rating and the rating outlook was stable. The affirmation primarily reflects the country’s strong external position, continued political stability, credible monetary policy and sound fiscal framework.

Hong Kong – Singapore Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Singapore decreased by 0.4% from HK$ 61,285 million in 2016 to HK$ 61,023 million in 2017. The top three export categories to Singapore were: (1) Electrical machinery, apparatus and appliances, and electrical parts (+17.2%), (2) telecommunications and sound recording and reproducing apparatus and equipment (+2.5%), and (3) office machines and automatic data processing machines (-13.2%), which represented 61.5% of total exports to Singapore.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restrictions on covering Singaporean buyers. Currently, the insured buyers in Singapore range from small and medium sized companies to listed companies. For 2017, the number of credit limit applications on Singapore decreased 18.8% while the amount of credit limit applications increased 81.8%. Insured business decreased by 2.7%. Major insured products were travel goods, electronics and artificial flowers, which represented 56.1% of ECIC’s insured business on Singapore. The Corporation’s underwriting experience on Singapore has been satisfactory, with no claim payment or payment difficulty case reported during the past 12 months (from May 2017 to April 2018).

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Last update: 7 May 2018

Fiscal years ending July 15th
Source: Economist Intelligence Unit

Political Highlights

Nepal adopted a new constitution in 2015 following years of political instability. The 2015 Constitution represented a key milestone for Nepal which included its first local elections in 20 years, elections to the House of Representatives and seven provincial assemblies. Nepal successfully held elections for all three levels of government (local, provincial and national) in late 2017 and moved from a unicameral to a bicameral parliament. The Communist Party of Nepal (CPN) emerged as the largest party in all three elections. Khadga Prasad Sharma Oli, the leader of the CPN, became the country’s prime minister in February 2018.

Nepal is a landlocked nation between India and China. The two countries compete for influence in Nepal, and the relationship between China and Nepal has been deepened in recent time, mainly owing to the Nepali government's policy of expanding its international reach since the blockade by India along the border in 2015. China has since increased their investments in Nepal’s agriculture, hydropower, information technology, tourism and infrastructure. In April 2018, China and Nepal are also exploring the possibility of a free trade agreement.

Economic Trend

* Estimates
Fiscal years ending July 15th

Source: Economist Intelligence Unit, The IMF, World Bank

Nepal relies heavily on foreign aid as the country is among the least developed countries in the world, with about one-quarter of its population living below the poverty line.

The country was hit by a devastating earthquake in early 2015 which damaged infrastructure and homes. Reconstruction efforts continued to dominate the policy agenda but growth is expected to slow from 7.5% in 2017 to 4.6% in 2018 and 4.5% in 2019 due to the heaviest floods in August 2017 combined with slow recovery of exports, slowdown in remittances and an increase in lending rates, according to the World Bank. In addition, the current account deficit will expand in the coming years owing to falling remittance inflows, higher oil prices as well as higher import of inputs for reconstruction work and infrastructure development.

Agriculture is the mainstay of the economy, providing a livelihood for almost two-thirds of the population. According to recent South Asian Climate Outlook Forum in April 2018, Nepal is likely to witness a normal monsoon this year, which is a synonymous with higher agricultural yields.

Hong Kong – Nepal Trade

Source: Census and Statistics Department of Hong Kong

Total exports from Hong Kong to Nepal increased by 55.2% from HK$ 1,230 million in 2016 to HK$ 1,910 million in 2017. The top three export categories to Nepal were: (1) telecommunications and sound recording and reproducing apparatus and equipment (+45.4%), (2) non-ferrous metals (+122.9%), and (3) photographic apparatus, equipment and supplies and optical goods, watches and clocks (+10.2%), which represented 90.1% of total exports to Nepal.

Source: Census and Statistics Department of Hong Kong

ECIC Underwriting Experience

The Hong Kong Export Credit Insurance Corporation (ECIC) imposes no restriction on covering Nepali buyers. In the past 12 months (from May 2017 to Apr 2018), the insured business from Nepal was limited and there was no claim payment or payment difficulty case reported.

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Last update: 3 May 2018